All simple interest loans work this way: Simple interest is a quick and easy method of calculating the interest charge on a loan. Simple interest is determined by multiplying the daily interest rate by the principal by the number of days that elapse between payments. The one thing that may give you pause, however, is determining how much your money is worth in your checking account, or being applied to other expenditures, versus being handed over to your bank/creditor. I've got a loan with only 2% APR, so I'd rather make regular payments at or just above the monthly minimum because the interest on the loan is minimal-----I'm paying pennies to enjoy the financing over time rather than throwing all my cash towards the payment to reduce the principal. It's 'cheap' money. We all have to make decisions as to the best use of our funds relative to savings & expenses.